×

Cramer agog: Common sense moving stocks

It hasn't happened in a while. But it happened today. And it happened so suddenly Cramer hopes you were sitting down.

Common sense moved stocks.

"I have said this over and over again. The stock market can be dysfunctional for days on end." But ultimately, fundamentals prevail and stocks move in ways that make sense.

"I think this crude oil decline has been a perfect example of how stupid the market can be, sometimes," Cramer added. For quite some time as oil declined, investors sold stocks in almost any and every sector.

However, in the current environment, Cramer thinks the decline in oil is actually very bullish. "The decline in oil translates into lower prices at the pump. That benefits consumers as well as a slew of companies. That's good!"




Adam Jeffery | CNBC

Yet, the market just sold off and then sold off more, oblivious to what Cramer considers a very bullish catalyst.

Then, on Wednesday, it all changed. Something that makes sense happened. Chipotle and Panera Bread gained, two upscale fast-service restaurants that should both benefit as lower oil, and lower gas prices encourage people to spend a little more.

In fact, the "Mad Money" host says all over the market, stocks moved in a common sense fashion.

"Disney regained lost momentum, as its crowds correlate with gasoline. Darden broke out; it too is levered to the price of gasoline. Costco went to new highs, again a bet on the consumer. Also, Monster Beverage and Hershey rallied; again that makes sense. Their products are sold at convenience stores, which in turn depend on spur-of-the- moment-buys, which happen when people feel a little richer."

Cramer said the same kind of common-sensical approach to the market moved stocks as varied as Sherwin Williams, PPG, PepsiCo, Colgate and more.

The takeaway, however, is consistent across all of these sectors.

---------------------------------------------------------------
Read more from Mad Money with Jim Cramer
As stocks slide, should strategy shift?
Cramer: Gauging the power of a nat gas trade
Despite value, Cramer says 'sell'
---------------------------------------------------------------

Cramer believes its confirmation that hedge funds were locking in gains for the year, and in turn, generated considerable selling. However, he believes bullish fundamentals remain very much in tact.

"Today we saw the confirmation. Common sense, so recently devoid in the market place, reared its rational head," Cramer said. And if commonsense remains a catalyst, then stocks could go higher.

"That's why I'm always saying don't get too negative on this market," Cramer added. "If you do, you tend to get smoked."

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com